5 Tips to Keep Credit Card Spending Under Control

Credit card spending is a large financial problem faced by many individuals. It is said that the average American household has over $8000 in credit card debt, and the number is growing. Getting your credit card spending under control should be a top priority. If you want to get your finances in order, follow these tips:

1. Lower your Spending Limit

Many people see the promise of a $10,000 or $20,000 spending limit on a credit card and get excited. They start to imagine all of the things that they can purchase. Sit back and think about the spending limit in terms of real dollars. Determine how long it would take you to pay off with your current salary. If you do not think you could pay it off, lower the limit to something more realistic.

2. Do Not Make Anticipation Purchases

Many people anticipate that they will get a raise by a certain point in their career. They might anticipate getting a certain sum of money by a certain date. It is always a bad idea to buy something unless you can repay it with the money that is currently coming in. Expecting a raise and then not getting it will not kill you financially if you have not overextended yourself.

3. Use Cash

Utilizing cash whenever you can is the best way to avoid credit card spending. Many times, an introductory APR makes it enticing to buy more than you should with cards. Do not put unnecessary items on your credit card regardless of how low the interest rate is. When you force yourself to use cash, you can only purchase exactly what you can pay for. When the cash runs out, you are done spending until you get more. Credit cards make it too tempting to get more than you can afford.

4. Make a Budget

This step is commonly known among most people in the world, but the application of it is rare. Many families today neglect to make a budget. This is one of the most effective ways to eliminate overspending. Set a budget for groceries, entertainment, variable costs and anything else you can. When you reach your budget for the week or month, do not put it on a credit card.

5. Start an Emergency Fund

Many people keep credit cards around for emergencies only. While this might be the best use of credit cards, it can still be avoided. Set aside a small percentage of your paycheck every month towards an emergency fund. Decide ahead of time how much you would like in the account. Three months worth of expenses is a good goal to shoot for. Once you have this on hand, you can eliminate the need for using your card for emergencies.

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